Legislative News. March-April 2017
This Client Update covers the key amendments to the laws of the Republic of Kazakhstan (‘RK’) and various legal developments introduced in March and April 2017.
NOVELTIES IN LEGISLATION
The laws covered by the present Client Update are related to both public and private sectors. Some of them may be of interest to you as they may affect your business in Kazakhstan.
We would like to draw your attention to the following legal acts.
TREATY ON THE CUSTOMS CODE OF THE EURASIAN ECONOMIC UNION
On 11 April 2017, the Member States of the Eurasian Economic Union (EEU) completed the signing of the Treaty . The EEU member states now proceed to domestic procedures preceding the ratification of the document.
The main novelty of the Customs Code is the expanded competence of the customs authorities in relation to collection of information on persons engaged in foreign economic activity related to the transportation of goods across the customs border of the EEU, as well as any other activity with respect to the goods under the customs control.
The new EEU Customs Code will come into force once the Eurasian Economic Commission (ECE) is notified on the ratification of the Treaty by all five member states, but not earlier than 1 July 2017.
AMENDMENTS TO THE CONSTITUTION OF THE RK
On 10 March 2017, the President of the RK signed the Law No. 51-VI ‘On Amendments to the Constitution of the Republic of Kazakhstan’.
The Law provides for the following major amendments to the Constitution of the RK:
Deprivation of citizenship is allowed only by a court decision for the commission of terrorist crimes, as well as for causing other grave harm to the vital interests of the RK;
Election by the Senate for a term of 5 years and release from office of the Commissioner for Human Rights in the RK;
The Government resigns before the newly elected Majilis of the Parliament of the RK.
The Law came into force on 14 March 2017.
AMENDMENTS AND ADDITIONS TO THE ENVIRONMENTAL CODE OF THE REPUBLIC OF KAZAKHSTAN
On 5 April 2017, the President of the RK signed the Law No. 56-VI ‘On Amendments and Additions to the Environmental Code of the Republic of Kazakhstan’. The Law expands the scope of responsibilities of the authorized body for environmental protection, in particular, monitoring of the volume of the greenhouse gas emissions. The Law also adds the terminology in the Environmental Code.
The Law came into force on 17 April 2017.
THE OFFICIAL REFINANCING RATE
On 1 April 2017, the Decree of the Board of the National Bank of the Republic of Kazakhstan No. 30 ‘On Official Refinancing Rate’ dated 24 February 2017 came into force.
According to the Decree, the official refinancing rate has been increased twice, from 5.5% to 11%.
Kazakhstan laws provide for the penalty in case of violation of tax, customs and other statutory payments due dates. The penalty is 2.5 times the official refinancing rate set by the National Bank of the RK for each overdue day.
DOSSIER FOR THE DRAFT LAW OF THE RK “ON AMENDMENTS TO CERTAIN LEGISLATIVE ACTS OF THE REPUBLIC OF KAZAKHSTAN ON SUBSOIL USE MATTERS”
In March 2017, a dossier for the draft Law of the RK ‘On Amendments to Certain Legislative Acts of the Republic of Kazakhstan on Subsoil Use Matters’ has been submitted to the Majilis of the Parliament of the RK for review (‘Draft’).
The Draft provides for the following amendments to Kazakhstan land laws (the Land Code of the RK dated 20 June 2003):
Cancellation of requirements on changing the purpose of the land plot for the subsoil use (save for the specially protected natural territories and forest fund lands);
Introduction of public servitude at the stage of exploration of minerals or geological exploration of the subsoil (with compensation for the servitude or recovery of losses);
Introduction of the new mechanism of land temporary withdrawal by analogy with land withdrawal for the state needs in case the land plot was not used for its intended purpose for certain period of time. This measure aimes at eliminating cases of abuse of rights by bad-faith land users.
The Draft envisages the following amendments to Kazakhstan administrative laws (the Code of the RK on Administrative Offenses dated 5 July 2014), namely, holding liable for the following administrative offences:
Illegal subsoil use operations;
Violation of the subsoil use reporting requirements, which replaces an administrative liability for disfiguration of the primary or public reporting on production and refining of raw minerals (due to introduction of the Mineral Reserves International Reporting Standard CRIRSCO);
Violation of the statutory requirements on accounting and safety of geological information (due to transition to the open access to geological information);
Violation by the subsoil user of the statutory requirements on education and science financing at minerals production stage;
Violation of the obligations to provide support to the Kazakhstan labor force and producers when carrying out subsoil use operations;
Violation of the rules for procurement of goods, works and services while carrying out subsoil use operations;
Violation of the procedure for subsoil use rights assignment and change of control over the subsoil user;
Violation of the order of notification of the competent body when assigning subsoil use rights.
The Draft further clarifies the liability, introduced earlier, for violation of the rules on rational and complex subsoil use (due to changes in the subsoil use regulation and transition to license regime for granting the subsoil use right with respect to solid minerals).
The Draft envisages the following amendments to the environmental laws (the Environmental Code of the RK dated 9 January 2007):
Elimination of the general environmental requirements at exploration and/or production stages;
Statutory environmental expertise;
Expansion of environmental grounds for subsoil use operations.
The Draft introduces a license fee for prospecting and subsoil users’ rent payments under the Budget Code of the RK dated 4 December 2008.
DOSSIER FOR THE DRAFT LAW OF THE RK “ON ENTRY INTO FORCE OF THE CODE OF THE REPUBLIC OF KAZAKHSTAN “ON SUBSOIL AND SUBSOIL USE” (as of 15 March 2017)
In March 2017, a dossier for the draft Law of the RK ‘On Enforcement of the Code of the Republic of Kazakhstan ‘On Subsoil and Subsoil Use’ was submitted to the Majilis of the Parliament of the RK for review. According to the draft law the Code of the RK ‘On Subsoil and Subsoil Use’ is expected to come into force from 1 July 2018.
Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy, and its legislation and legal system are in constant development. Should you have any questions or want to discuss matters addressed in this Client Update, please contact us.